Second reading for Mining Act

The second reading stage generally signals that approval in principle has been given to legislation.

Bill 71, which received first reading in October, is expected to achieve speedy approval, and the province could have a new Mining Act as early as year-end.

“The need for a new Mining Act has long been recognized in Ontario,” said Mines Minister Hugh O’Neil. “We know that the mineral exploration and mining sectors are of vital economic and social importance to the province,” he said.

According to government figures, the mining industry contributes more than $7 billion a year to the provincial economy and provides jobs for more than 85,000 people.

The Mining Act Amendments Bill is under review by a committee of the legislature prior to third and final reading. A major objective of the committee-stage is to ensure that no one is unduly affected by the new legislation.

However, the Prospectors and Developers Association of Canada (PDAC) still has some concerns about a number of proposed changes to the Act. The organization recently sent a letter to O’Neil, expressing its concerns about the increased use of regulations proposed in the new Act.

Specifically, the PDAC objects to staking procedures being set out in regulation form rather than in statute form within the Act itself.

“In our view, legislation governing staking procedures, once established, should be as immutable as possible,” says the PDAC.

Another concern relates to the area of relief against forfeiture of claims. The PDAC would like to see the current relief against forfeiture provision retained and a method established whereby forfeiture cases can be dealt with on an individual basis by the mining commissioner. “Without such a provision, claim-holders risk the loss of their claims perhaps because of a clerical oversight or error. In our view, relief against forfeiture must be retained in the Act and should come within the purview of the mining commissioner,” says the PDAC.

The fact that lease rental rates are going to increase to $1,000 for a single claim per year, up from the current $20 per year, isn’t welcomed either. “If that isn’t confiscation by taxation, then I don’t know what is,” says a PDAC spokesman.

“We do not welcome the proposal that the lease rental rate will be set higher than the corresponding dollar value assessment requirement for the same area. In our view, such a move could amount to confiscation by taxation since small mining companies and individuals will not have the resources to maintain their leases.”

The PDAC would like to see patents and leases treated equally in terms of payment due to the Crown, or alternatively, that annual lease rental rates be lower than annual tax rates on patented land.

Finally, there was disappointment with the fact that a provision (Section 104) was retained, calling for domestic processing of ore. The PDAC considers the provision anachronistic and inappropriate in an era of Free Trade and falling trade barriers.

“The ability of producers to export minerals in less than pure form is likely to enhance the province’s competitive position. Ontario is the only province that has retained this provision in its legislation,” notes the PDAC. The province does grant some exemptions to certain producers, however. For example, Falconbridge Ltd. (TSE) is granted exemptions to ship its nickel matte to Norway.

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